Gyroscopic Investing

"Once upon a time, asset allocation for an individual investor amounted to a simple formula: stocks, bonds, cash and gold.

The financial rule of thumb involved keeping 5% to 10% of a portfolio in gold, as a salve for uncertain economic times -- a hedge against inflation, currency risk, and political and socioeconomic troubles.

As asset allocation evolved to where investors could slice and dice the world into precise slivers and varied exposures, the rule about holding gold started slipping away: The traditional gold allocation rule was cut back from 10% of assets down to 5% when it didn't seem to work so well over the course of the 1980s, and it continued to decline until going virtually extinct during the bull market of the 1990s. It re-emerged -- perhaps as an alibi for chasing performance -- as gold bounced back strong when the Internet bubble burst. For the better part of the past decade -- fueled by easier access and trading thanks to the emergence of exchange-traded funds -- average investors and professional money managers have adopted the standard gold allocation."

from
https://news.fidelity.com/news/article. ... sting-etfs

Oh boy, that seems like a top indicator.  Historical revisionism to wipe egg off face and act as if such was always thus. 

That's so stupid.  I can't believe they would take that approach to explaining away three decades of stock pumping.

MediumTex wrote: That's so stupid.  I can't believe they would take that approach to explaining away three decades of stock pumping.

Harry had a chapter in one of his books (almost certainly "Why the best-laid investment plans often go wrong") about how the main talent that most investment letter newswriters is pretending that their previous calls were profitable, on the apparently valid theory that no one is going to go back and see what they actually predicted. This is just another example of the same phenomenon.

Libertarian666 wrote:

MediumTex wrote: That's so stupid.  I can't believe they would take that approach to explaining away three decades of stock pumping.

Harry had a chapter in one of his books (almost certainly "Why the best-laid investment plans often go wrong") about how the main talent that most investment letter newswriters is pretending that their previous calls were profitable, on the apparently valid theory that no one is going to go back and see what they actually predicted. This is just another example of the same phenomenon.

I can just hear the Fidelity marketing meeting in which this message was developed:

Fidelity Guy #1: Come on, our customers may be stupid and gullible, but surely they're not THAT stupid and gullible.

Fidelity Guy #2: Well, I think they are that stupid and gullible and I think we're going to go with this message.  Think of it as the investment version of that Shaggy song "It Wasn't Me."